By Mark Seavy  

Consumer demand for better-for-you beverages has increased significantly, which means the potential for licensing is also growing.   

The array of “functional beverages” (drinks that contain ingredients like minerals, vitamins, amino acids, dietary fiber, and probiotics) is quickly gaining popularity with consumers and suppliers alike. And, as more brands and retailers enter this increasingly crowded market, it’s likely that opportunities for brand licensing will also expand. 

Coca-Cola Co., for example, launched Simply Pop soda in February. The range contains six grams of prebiotic fiber, zinc, and Vitamin C. Olipop is sold in more than 25,000 stores and has a valuation of $1.8 billion after recently raising $50 million. Then there is Poppi, which has secured partnerships with celebrities like Kylie Jenner, Billie Eilish, and NBA star Russell Westbrook. It also recently a co-branded line with Microsoft’s Minecraft brand. PepsiCo has thrown its support behind Gatorade and Propel brands as well as the protein shake Muscle Milk. And Celsius recently acquired Alani Nu, a sports and energy drink company popular with young women. 

“On protein beverages, we’re trying to participate in that with a sense of urgency,” PepsiCo CEO Ramon Laguarta told analysts. “We’re trying to participate in the functionality of the beverage category, functional hydration with Gatorade and Propel, [and] we see a chance to create more opportunity with hydration and hydration plus protein.” 

And in perhaps the surest sign of better-for-you beverages’ increased emphasis, Walmart late last year rolled out a “Modern Soda” category both in stores and in a special section online that features Olipop, Poppi, and stevia-sweetened Zevia. 

This expansion stems from consumers looking to beverages to do more than just quench their thirst. In many cases, consumers are relying on beverages to replace meals, supplement their diets, provide recovery after a workout, boost their energy, and offer relaxation. It’s a tall order, but suppliers are making these better-for-you beverages an important part of their product mix. 

“Consumers want more out of their beverage, more out of what they are consuming,” Celsius CEO John Fieldly told Supermarket News. “They want real ingredients.” “

The shift from sugary drinks to better-for-you beverages has created a global market that hit $197 billion in sales in 2023 and is forecast to increase 8.5% annually to reach $484 billion by 2034, according to Zion Market Research. Additionally, 72% of consumers surveyed by Fact.MR responded that it was extremely important to recognize a product’s ingredients before consuming. This increased awareness indicates a need for greater transparency around ingredients to allow for informed decision making in dietary choices. 

“We have taken measures to try and sort of maximize the impact of our innovation and execution to step [better-for-you beverages] up and we have strategies for it like Vice Guava,” Monster Beverage Corp. CEO Rodney Sacks said. Vice Guava, which was launched by the company in October, is a zero sugar energy drink.